Meet with investors: Will do whatever it takes to make India global growth engine, says PM

Prime minister Narendra Modi on Thursday promised “whatever it takes” to make India the engine of global growth, as he invited the top executives of 20 global pension and sovereign wealth funds that together manage about $6 trillion in assets to be part of the country’s “exciting progress ahead”.

The virtual global investors’ roundtable is the latest in a series of meetings held by the PM to draw large-scale foreign investments, especially in infrastructure, to bring the Covid-hit economy back on its feet fast.

It comes at a time when domestic private investments have remained anaemic and anti-China sentiments are growing globally.

Top executives of global funds, including AustralianSuper, British Columbia Investment Management Corporation, CDPQ, GIC, Japan Post Bank, Korean Investment Corporation, Mubadala, Caryle, Qatar Investment Authority, Temasek and US International Development Finance Corporation, attended the virtual roundtable.

Six domestic corporate honchos — Mukesh Ambani, Ratan Tata, Dilip Shanghvi, Nandan Nilekani, Uday Kotak and Deepak Parekh — also joined the conference.

Addressing the investors, Modi said: “If you want returns with reliability, India is the place to be. If you want demand with democracy, India is the place to be. If you want stability with sustainability, India is the place to be. If you want growth with a green approach, India is the place to be.”

“Friends, India’s growth has the potential to catalyse global economic resurgence. Any achievement by India will have a multiplier impact on the world’s development and welfare. A strong and vibrant India can contribute to the stabilisation of the world’s economic order.”

“We will do whatever it takes to make India the engine of global growth and resurgence. There is an exciting period of progress ahead. I invite you to be a part of it,” the PM said.

Earlier this week, economic affairs secretary Tarun Bajaj said the PM would subsequently hold one-to-one meetings with the global investors as well.

Modi impressed on the global funds to take advanatge of the opportunities in the infrastructure sector. Projects involving potential investments of $1.5 trillion over a six-year period through FY25 are showcased under the government’s National Infrastructure Pipeline (NIP), he added.

He highlighted the country’s low income tax rate (15% for setting up fresh manufacturing units), faceless income tax assessment regime and production-linked incentive schemes in key sectors and reforms like the Insolvency and Bankruptcy Code to draw investments.

Stressing the attractiveness of India as an investment destination even during the pandemic, Modi said overall foreign direct investment (FDI) inflows rose by 13% year on year to a record $35.73 billion in the April-August period.

India’s reliance on FDI grew substantially in recent years, as overleveraged domestic investors cut down on fresh expansions.

Even before the pandemic struck, the share of gross fixed capital formation (GFCF) in GDP collapsed to 29.8% on year in FY20 from as much as 34.3% in FY12. The GFCF contracted by 6.5%, the lowest in the current GDP series, in the January-March period, having recorded a third straight quarter of fall. In the June quarter, thanks to the pandemic, the GFCF slid by a steep 47.1%, far worse than a 23.9% contraction of the overall real GDP.

The latest roundtable is yet another attempt by the Centre to not just hear out investors’ concerns but also make concerted efforts to resolve nagging issues through discussions among several wings of the government. The government has already compiled a list of suggestions shared by global investors in their meetings with the PM over the past six years and the actions taken on them before Thursday’s meeting, a senior official told FE.